lookin forward to anecdotal evidence of this in santa cruz CA over this weekend...

Now if they're substituting walking/biking for driving, the next big story might be about how Americans are suddenly getting healthy en masse.

Good. Overall a good thing for the entire planet.

Miles driven is down 4.3 percent, but watching gasoline consumption at: This Week In Petroleum Gasoline Section  has shown gasoline consumption to be down only about 0.7-2.3% ... so people are switching to even less fuel efficient vehicles?

Part of it could be the DOE's method of short term gasoline demand is off (look at the jump from march long term to short term in the bottom graph) (but still, that yields the about 2.3% drop of consumption). Or it could mean that the only people cutting down in miles are the ones who's shifted to more fuel efficient cars. The ones with the F550's with 4 back tires, and the expeditions with low air pressure just keep on driving. How can one keep up appearances with an SUV in the driveway?

still, 16% rise in fuel prices YOY to get a 1-2% reduction in demand? That's a bit inelastic.

Demand yes, price no. 1st!

This report should help oil to 200.

Peak Traffic?

Lawyerliz,

Worldwide oil production appears to have peaked in 2006.

Part of the reason, IMHO that vehicles miles aren't dropping comensurate with rising prices for gas is that there is so much latent demand for driving constricted roads. as soon as demand eases for the road by one party, another party finds that value of using the road in terms of reduce commute time (vis a vis transit or what would have been a more congested commute) offset increases gas costs

Say I drive 13 miles to work each way; @ 26 mpg that's 8 bucks in gas round trip, or $2 more than I paid last year. Meanwhile parking is $10/day and value my time at $50/hour during work hours when I could be producing income. Gas is still a small part of the fiscal equation.

tj & the bear, I thought the most recent data showed the highest ever production (it just came out).

CR, do you have a link?

Borrowing money over decades is much easier then paying it back.

CR,

You're right (of course)! Looks like February reached a new all-time high of 74.66mbd for crude oil, besting January by 226,000bd -- which itself was barely above levels achieved in 2005. We'll have to see if it's more than a temporary blip.

Warning! PDF:

http://www.peakoil.nl/wp-content/uploads/2008/05/2008_may_oilwatch_monthly.pdf

cathyG: maybe the earlier increases in price and rumblings of peak oil caused the flatening. It's not like last few summers were the cheapest gas on record.

The Truckline ATA Index is declining as well:

http://www.truckline.com/NR/exeres/147566B2-1834-45A3-B888-E1AA21602E6F.htm

Why do you assume gasoline price is the only factor which could reduce demand?

I have been telling the marketwatch people that oil is going to drop significantly after this summer.

Define "significantly".

Say I drive 13 miles to work each way; @ 26 mpg that's 8 bucks in gas round trip, or $2 more than I paid last year. Meanwhile parking is $10/day and value my time at $50/hour during work hours when I could be producing income. Gas is still a small part of the fiscal equation.
Flotown

more Perfect Statistical Analysis prejected from one's own experience to eveyone in the nation.

I applaud you. What's the Math called?

CathyG writes:
I get it that the increase in gas prices has likely caused demand to drop over the last few months. But what caused it to flatten so clearly over the last 2+ years?

Bob writes:
Why do you assume gasoline price is the only factor which could reduce demand?

I was projecting this from as long ago as the 2000 Census. VMT had been set to peak and even decline due to a number of demographic and transect factors. The key to watch will be average vehicle occupancy.

And I nearly forgot-the latest peak is just barely over the previous monthly peak set back in May of 2005. Even if the new peak isn't just statistical noise, it still isn't good news. The population has gone up faster than that!

For good info on this kind of stuff, hang out at The Oil Drum | Discussions about Energy and Our Future  a little while.

Since the last plateau peak in 2005, there are 180 million more people on planet earth...(if you believe population stats)

that's half our countries population in three years...

the average american is responsible for 26 barrels per year(avg)(on 300mm,pop)

Gasoline consumption (and therefore VMT) is inelastic in the short term (around -0.25), but much more so in the medium or long term - if gasoline prices stay high (-0.6). There are quite a few studies on this - but they are dependent on other factors such as location and economic drivers.

As for fuel sales, the accuracy of fuel sales data depends on where the data is collected. If it is at the terminal rack (a Canadian term) then, there is quite a bit of variability depending on when fuel deliveries occur through the pipelines (only one type of fuel is delivered in one batch, so if a batch of gasoline is delivered right before the close of a reporting period one year and after the close of a reporting period of the next, there can be big swings). Data on fuel sales at the pump tend to be quite a bit more refined (but harder to collect).

For those thinking global demand will decline "significantly"...

Export Land Model - Wikipedia, the free encyclopedia 

I'm for the 4 day work week Aimlessdriver.

Bob,
that gives me an idea..

Winston writes:
Rob,

BART increased its fares 5.4% in January and probably will do so again next January. They're also talking about raising parking fees and have just increased parking fines for those who don't pay the fees.

Where's my $2.00 gas? Seriously, $2.00 per gallon is far less of a subsidy to drivers than the current fare structure is to BART riders and BART is one of the least money losing agencies in the nation.

Rob,
I think they're including the new Orange Line under rail even though it's a bus on a dedicated road. It's had a 20K increase in boardings. Unfortunately, the trend lines only show average weekday boardings for bus lines not rail lines.

The Metro begins introducing turnstiles next year. I'll be curious to see the statistics once they're installed city wide.

I take the train from time to time. You may not like it, but I think it's a great investment for the city. Commerce has definitely grown around the transit hubs. East LA will come online soon. It's amazing how fast new easy access changes the economics of an area.

I'm struck by the correlation of a halt in the increase in miles traveled and recession of economic activity. That makes the plateau in miles driven the last two years especially striking.

Homedebtors are choosing between gas or food now

LOL!

Anyone notice that beer prices have been getting jacked up lately?

anon-1797
Look at the last graph on the page:
The page cannot be found
Specifically this graph:
http://tonto.eia.doe.gov/oog/info/twip/gtpsusm.gif

Total demand is actually cratering.

This is not a drill, gas prices have been rising slower than normal, as sales have fallen, stuffing the channels.

Now, how come heating oil (near to diesel) is still sky high?

Um, Bueller?

Could it be that there is no pricing power in the industry due to lack of demand?

Oil will get slaughtered as they figure out the demand destruction going on here.

Same argument goes for houses.

Someday this war's gonna end...

"AllenM writes:
Total demand is actually cratering.
This is not a drill, gas prices have been rising slower than normal, as sales have fallen, stuffing the channels.
Now, how come heating oil (near to diesel) is still sky high?"

The story is that the shortage is on the diesel side; there's no supply problem with gasoline. The Europeans use a lot of diesel for their car fleet, and non-OECD countries (mainly China) are buying up diesel to run generators.

However, there's also a feeling that the big refiners want to try to keep the heat off themselves during an election year, as well as squeeze the smaller refiners.

"Could it be that there is no pricing power in the industry due to lack of demand?
Oil will get slaughtered as they figure out the demand destruction going on here."

That's been the end of every oil spike. Even though the U.S. has not been the major source of new demand, it is still the largest customer. And there's plenty of room for conservation/demand destruction.

China/India can eventually fill any gap in demand created by conservation, but is wildly unclear whether they would want to become too dependent upon OPEC. The U.S. was a major oil producer when it's energy-intensive infrastructure was built up; the Chinese and Indians don't have the same luxury.

Look at the three day gain in supply- and then begin to look at a 10% drop in demand.
21 to 24 day increase, already.

I read this as good news. It implies that, SUVs notwithstanding, the US can react to oil prices more rapidly than in the 70s.

Rob Dawg,
I'm just curious, how do you feel about federal highway funds?

FT and Chicago,

Careful now, you are applying logic to the realm of religion!

Cmon, how would any agency possibly have a solid mathematical handle on how many miles are being driven by the 60+ million automobiles in America? My hunch was this was just a statistical extrapolation from some sample and one that invariably contains some fudging. What wasn’t reported was that FHWA has only 4000 automated devices on America's roads that count traffic volumes. The interstate system alone is over 46,000 miles in length. Another 5.7 million miles of paved roads exist from other federal highways, state roads & highways, local avenues and boulevards, plus the dinky street from your cul-de sac to the gas station. So that’s 1 recorder per every 1,425 miles.
Hence the fudging...uh, I mean statistical extrapolations.
I googled a link to a recent DOT study citing the margin of error on their statistical samples ranged from 5% on low-variable use roads to almost 9% on roads w/ highly variable use. So the margin error may be twice as big as the reported decline in usage. Sheesh.